The government has announced proposals to stop residential landlords ending assured shorthold tenancies (ASTs) in England on a no-fault basis.
Currently landlords are permitted to terminate ASTs on two months’ notice by serving a notice under section 21 of the Housing Act 1988, without providing any reason, so long as the contractual term agreed at the outset had expired.
The government’s proposal is that landlords will have to provide ‘a concrete, evidenced reason already specified in law for bringing tenancies to an end’. This will effectively create open-ended tenancies which the government says will bring greater peace of mind to those living in rented accommodation.
However landlords’ organisations have already expressed a concern that these changes could make residential property investment less attractive, which may result in fewer properties being made available for renting, and perhaps lead to higher rents as well. To assist landlords who want to occupy their property once again, or sell it, the government says that there may be amendments to the current eviction procedure ‘so property owners are able to regain their home should they wish to sell it or move into it.’
The government has not yet indicated when it will launch a consultation on these proposals. However given that it has indicated it does intend to launch a consultation there is likely to be a delay of at least 6 to 9 months before any new legislation can be passed.
The consultation will need to consider, amongst other things, whether any changes will apply to existing ASTs or only new ones entered after any new law takes effect, and whether rent increases will be permitted under the proposed new style tenancies given that they are likely to run for longer periods.
It is likely to be some time before any new legislation is passed, if indeed it is, but this could cause a major change in the landscape for both tenants and landlords.